- Indexed universal life insurance (IUL) has a cash value component that grows based on a market index. IUL policies allow you to adjust the death benefit and pay your premiums with your cash value as time goes on. IUL is more expensive, complex to manage, and its growth potential less predictable than standard whole life insurance.
nsurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured. Most people have some insurance: for their car, their house, their healthcare, or their life.
Insurance policies hedge against financial losses resulting from accidents, injury, or property damage. Insurance also helps cover costs associated with liability (legal responsibility) for damage or injury caused to a third party.1
Key Takeaways
- Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies or perils.
- There are many types of insurance policies. Life, health, homeowners, and auto are among the most common forms of insurance.
- The core components that make up most insurance policies are the premium, deductible, and policy limits.
